STEP 3

Prepare a Starting Out One Page Plan

Prepre your one page plan

Planning is priceless, the plan itself is not. The point of a plan is to create a road map for your business that shows all the important details about your business and where you want it to go. And ideally this will be done all on just one page.

What is a Business Plan?

Planning out your business in advance gives you direction and helps to keep the business on track. A business plan is a written document that describes in detail what the business is all about, how the business defines its objectives and how it will go about achieving its goals.

Traditionally, this document describes key elements about the business including:

      • Company Overview
      • Details of your Products & Services
      • Market Analysis and Competition Summaries
      • Sales and Marketing Plans
      • Management Plan
      • Team
      • Milestones and Progress Reporting
      • Operation Plans
      • Financial Plans

The document will also likely include references to market studies and have attachments such as spreadsheets.

Why do you need a business plan?

The reason that you write a plan depends on the purpose that you need it for. There are a couple of different reasons that you might need a plan, these include:

      • To explain a Business Idea
      • For use as a Lean Management tool
      • To obtain Traditional Financing
      • For Prospective Investors

Writing a business plan helps formalise your idea in writing and it gives you the start of a blueprint for acting on those ideas.

The benefits mostly come from the thinking process that supports its writing. It is here that you consider all the elements that make up your business and its model of operation.

How long should it be?

The first question that usually comes up is “How long does a business plan need to be?”

The answer to this question is, “It depends on what you need the plan to achieve?”

It is our belief that you should start with a one-page plan.

There are several reasons for this, but the biggest reason is best stated in a quote from Steve Blank, “no business plan survives first contact with customers”. That means that while your key assumptions and the details about your idea are great, they will often change when put in front of customers.

The first draft of a plan like this should take less than one hour. This is where you capture the details of your customers, competitors, how you will make and spend money, and begin to layout your value proposition. As you write all of this down it help you develop clarity in your thinking about your new business.

The point of a one-page plan is to keep the points short because then you must use laser like focus on what you are writing about.

What needs to go into a one-page plan?

We will use some of the information that you wrote down from the previous chapter to start building the plan. What you are looking to document includes:

      • The Problem you are Solving
      • How you will Solve It
      • Your Value Proposition
      • Your Target Market
      • Sales and Contact Channels
      • Milestones
      • Team
      • Key Partners
      • Revenue Streams
      • Cost Structure

If you are looking for Funding, then some of this information will be switched out for the following:

      • Funding Needed
      • Financial Projections
      • Competitors
      • Sales & Marketing

You may not have all this information right now but as you work through this and the next few chapters you will start getting together what you need. Then you can easily update this plan as the information comes in.

What goes into a long-form business plan?

You might still be thinking to yourself that you must prepare a long-form business plan. The bigger the risk that you are taking, or you are asking investors to take, then you might want to develop a more comprehensive plan.

Two major reasons why you would not want to create a big plan on first pass would include:

  1. When you ‘sell’ a big business plan to investors, they are ‘buying’ your plan and expect you to implement it as it is. Even if that plan turns out to be wrong.
  2. When you have put a lot of time, energy, and effort into producing a long form plan then you are less likely to throw the entire thing away when some of your key assumptions fail. This is what is known as the sunk-cost fallacy.

A long form plan addresses many of the same things as a one-page plan however the information will be much more detailed and contain fewer assumptions.

This just means that you will have tested the assumptions, and they are more likely to hold. To have validated these assumptions you will have spent time and money into research and develop evidence on matters like:

      • Costs;
      • Market size;
      • Preferences; and
      • Competitor maps

The more comprehensive the plan, the more likely you will need to have some help from a professional advisor to complete all the parts.  This is because there is a greater reliance on the document and the demand for accuracy will be high. Most investors will be interested in the money side of the business, so you will often need an accountant or bookkeeper to assist with the preparation of the financial forecasts and budgets.

To give you an idea of what goes into a long form business plan, here is a general summary of content headings:

    1. Executive Summary
    2. Company Overview
    3. Products & Services
    4. Market Analysis and Competition Summaries
    5. Risk Assessments
    6. Sales and Marketing Plans
    7. Management Plan
    8. Team
    9. Milestones and Progress Reporting
    10. Operating Plans
    11. Financial Plans
    12. Appendices and Exhibits

What can go wrong with writing a business plan?

There are several things that can go wrong with a plan. Some of the more common mistakes to avoid include:

      • Writing the ‘wrong’ style of plan for what you need
      • Underestimating how much money it will take to get started
      • Being too reliant on only one or two major customers or suppliers
      • Being too optimistic about sales growth in forecasts
      • Building unrealistic financial projections
      • Relying on sketchy research not verified by reliable sources
      • Not including any contingencies, in budgets for cash and time
      • Including too much information

You will notice that a lot of these relate to the finance of the business. There is absolutely nothing worse than starting a business under-funded as it is always very difficult to get back in front. So being realistic at the outset about the finances will always put you in a good place.

The last point to make is that with a long-form business plan you should ask several people to review your plan before submitting it. Another set of eyes can help you identify things that you might have overlooked such as a spelling mistake, grammatical errors or cut and paste issues with consistency.

Now you should have a clear idea on what sort of plan that you want to build. We hope we have sold you on the idea of starting with a one-pager until you start to get some validation.

R

Next Steps

In the next chapter, Chapter 4: Products and Pricing, we are going to take a look at the types of Products you will offer and give you some ideas surrounding pricing strategies.

CTA: Want to join a Pre-Cede workshop about this topic? Sign up here!

The Co-Action Project